Partner for Woolnorth wind farms announced

Guohua Energy Investment Co. Ltd (Guohua) has been selected as the preferred partner to take a 75 per cent share in Hydro Tasmania’s wind farms in north-west Tasmania. Hydro Tasmania retains the remaining 25 per cent share. Visit Gouhua's website here > 

Guohua has over $3.5 billion of wind assets and $2.6 billion of other assets under management with a portfolio of more than 20 wind farms across China totalling more than 3000MW, with a further 1500MW currently under construction. Guohua is a subsidiary of Shenhua Group Corporation Ltd.

It will pay $88.6 million for the share in the two wind farms. This values the two wind farms at Woolnorth at $282 million. The transaction will see $30 million in tax returned to the State of Tasmania from the sale process.

Hydro Tasmania chairman Dr David Crean described the transaction as an outstanding result for the State. It will remove $208 million of debt from Hydro Tasmania’s balance sheet, reducing the total debt figure to just over $735 million.

“This will greatly facilitate the financing of the Musselroe wind farm project which began construction this month,” Dr Crean said.

“The transaction crowns a profitable chapter in Hydro Tasmania’s renewable energy development history. The conclusion of the agreement represents a net cash benefit of over $30 million on Hydro Tasmania’s overall investment in wind farms while it still retains a significant 25 per cent equity stake in Woolnorth.

“I joined Hydro Tasmania at the opening of Bluff Point wind farm in 2004 and have seen our wind development model evolve to its current highly efficient and effective form. Our involvement in wind has shown it to add considerable value through augmenting Hydro Tasmania’s generation portfolio. It also complements perfectly our hydro capability, providing the renewable energy certificates to meet our retail obligations and generates profit and value for our shareholders, the people of Tasmania.”

Financial close on the transaction is targeted for February 2012. Following this there will be a six-month exclusivity period for Hydro Tasmania to negotiate Guohua’s involvement in the Musselroe project.

Guohua is well known to Hydro Tasmania, having worked in partnership with the former Roaring 40s joint venture in the construction and operation of around 300MW of wind projects in China from 2006-09.

Hydro Tasmania CEO Roy Adair welcomed the signing of a binding agreement between the two parties and described Guohua as a first-class strategic partner for Hydro Tasmania and the state.

“Guohua is one of the world’s largest wind developers and brings a wealth of expertise in the renewable energy sector and a strong interest in working with us on other renewable energy projects,” he said. “We look forward to the prospect of working with Guohua on Woolnorth, Musselroe and future projects.”

Hydro Tasmania and Guohua are also seeking to develop a Strategic Co-operation Agreement. The aim is to foster closer co-operation between the organisations as they seek to develop other clean energy projects in the Australian and international renewable energy markets and leverage their respective strengths.

Guohua Chairman Mr Jianning Xie said Guohua is pleased to have been selected as Hydro Tasmania’s partner.

“Woolnorth represents our first investment in the renewable energy sector in Australia in line with our overseas strategy. We are very happy to work with Hydro Tasmania again after the partnership with the former Roaring 40s,” Mr Xie said.

“We believe our businesses and Hydro Tasmania have complementary advantages and the strategic co-operation between us will create significant long-term value. We are therefore looking forward to evaluating the Musselroe wind farm early in the new year and working with Hydro Tasmania on other projects.

“We see such strong potential from this partnership with Hydro Tasmania that Guohua is planning to locate its Australian renewable energy headquarters in Hobart.”

Guohua was selected following an extensive competitive bidding process first announced on 5 September 2011 as part of Hydro Tasmania’s progression to the next stage of its wind development model. This followed the successful disaggregation of the Roaring 40s joint venture in June 2011.

The successful bid has been approved by Hydro Tasmania’s shareholder Ministers and final approval from the Foreign Investment Review Board is imminent.

Hydro Tasmania is committed to building its wind portfolio to complement its hydro generation assets and its retail business. It was assisted in the divestment process by ANZ Project Advisory and Guohua was advised by Deutsche Bank.

Hydro Tasmania has appointed National Australia Bank as the exclusive mandated arranger, underwriter and syndicator of the debt facilities for the wind farms.

For further information please contact Samantha Meyer, Hydro Tasmania, on 03 6230 5746.

Background information

Woolnorth wind farms

Bluff Point (65MW) 37 turbine wind farm, commissioned in 2004, located approximately 47km west of Smithton

Studland Bay (75MW) Commissioned in 2007, the 25 turbines are located on a site seven kilometres south of Bluff Point wind farm.

Both formerly owned by Roaring 40s in a 50-50 joint venture between Hydro Tasmania and China Light and Power.

Musselroe

Greenfield wind farm development. Construction has begun on the 168MW project, which is expected to be completed and operational by July 2013.

Find out more about Hydro Tasmania's wind developments > 

Supporting information

Hydro Tasmania

• Australia’s leading clean energy business and the nation’s largest water manager with a workforce of 914 people
• $5.5 billion worth of assets with a generating capacity of 2421 MW. Operating 30 hydro-electric power stations (including 3 mini-hydro stations) in an integrated system with more than 50 large dams
• Value of power system realised through trading electricity and energy products in the Australian National Electricity Market
• Momentum - Victorian-based electricity retail business, visit the Momentum website
• Entura - professional services business with 350 employees working out of offices in Hobart, Melbourne, Brisbane, Adelaide and New Delhi, India. Visit the Entura website
• Proud history of almost 100 years in power engineering and dam construction
• Leader in development and application of sustainability principles for the international renewable energy industry

Guohua Energy Investment Co Ltd

• Headquartered in Beijing, China
• Leading renewable energy investment company in the People’s Republic of China with around $A3.5billion of wind power assets plus $2.6 billion of other assets under management; employs around 2000 people
• Commenced operation of its first wind farm in 2003 and has since developed a portfolio of more than 20 wind farms across China with more than 3000MW in operation and a further 1500 currently under construction
• 11th largest wind developer globally
• Founded in 1998 by its 100% shareholder Shenhua Group Corporation Limited, a state-owned enterprise and the world’s largest coal business